The UAE’s commitment to share financial data on individuals
and legal entities under Common Reporting Standards (CRS), starting in 2018,
could mean banks and financial institutions will start collecting required
financial data from early 2017.
The CRS, developed in response to the G20 request and approved
by the Organisation for Economic Cooperation and Development (OECD) Council in
2014, calls on jurisdictions to obtain information from their financial
institutions and automatically exchange that information with other
jurisdictions on an annual basis.
The CRS sets out the financial account information to be
exchanged, the financial institutions required to report, the different types
of accounts and taxpayers covered, as well as common due diligence procedures
to be followed by financial institutions.
A few banks in the UAE have already informed their customers
on the reporting requirements related to their tax status and tax domicile.
HSBC in a recent circular to its customers has said: “The
local laws [relating to CRS] will mean that from the beginning of January 2017,
governments will start requiring all banks and other financial institutions to
ask customers for information with a view to determining where they are
resident for tax purposes.”
According to OECD’s website, the UAE along with Saudi Arabia,
Bahrain Qatar and Kuwait will start collecting data on individuals and
companies starting January this year and will be ready to share the data with
other international jurisdictions starting 2018.
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